Stocks drop on rate jitters

The Standard & Poor’s 500 index slid to its first loss in four days after the new chief of the Federal Reserve told Congress he’s feeling more optimistic about the economy.

Fed Chairman Jerome H. Powell’s highly anticipated testimony before the House Financial Services Committee included encouraging words about the economic data that have arrived in recent weeks.

But some investors speculated that could mean the central bank will get more aggressive in raising interest rates, which can hurt stock prices by making bonds more attractive.

“My personal outlook for the economy has strengthened since December,” Powell said in response to a question about whether the recently passed tax cut and other moves by Congress have changed his outlook for how quickly the Fed will raise interest rates.

That depressed the price of existing bonds and sent Treasury yields higher. The yield on the 10-year note climbed to 2.90% from 2.86% late Monday.

Real estate investment trusts in the S&P 500, which are among the biggest dividend payers, lost 2.1%, the biggest loss among the 11 sectors that make up the index. Utilities fell 1.7%.

Comcast had one of the biggest losses in the S&P 500 after it launched a bid for European pay-TV broadcaster Sky. The buyout offer is for 22.1 billion pounds ($29.5 billion), and Comcast’s Class A shares fell 7.4% to $36.66.

Shares of Walt Disney Co. also fell because the Comcast bid could disrupt its takeover offer for 21st Century Fox. The Burbank company lost 4.5% to $104.87.

Macy’shad one of the biggest gains in the S&P 500 after reporting sales and profit that exceeded expectations. Its forecast for 2018 earnings was also higher than analysts expected. Macy’s rose 3.5% to $28.40.

France’s CAC 40 was close to flat and Germany’s DAX down 0.3%. The FTSE 100 in London was down 0.1%.

Japan’s Nikkei 225 jumped 1.1%, South Korea’s Kospi dipped 0.1% and the Hang Seng in Hong Kong lost 0.7%.

Benchmark U.S. crude fell 90 cents to $63.01 a barrel. Brent crude, the international standard, dropped 87 cents to $66.63 a barrel.

Natural gas was nearly flat at $2.68 per 1,000 cubic feet, heating oil fell 2 cents to $1.96 a gallon and wholesale gasoline lost 2 cents to $1.80 a gallon.

Gold dropped $14.20 to $1,318.60 an ounce, silver lost 19 cents to $16.43 an ounce and copper fell 4 cents to $3.19 a pound.

The dollar rose to 107.42 Japanese yen from 106.91 yen late Monday. The euro dipped to $1.2236 from $1.2312.